Lets congratulate the Bush administration, the Federal Reserve and the democrat
controlled Congress. It looks like they have come up with a breakthrough approach
to problem solving that may finally end the world's problems once and for all.
The breakthrough came with the idea to freeze ARM rates so
that borrowers will not be subjected to the terms of the agreements that they
voluntarily signed. Combine that innovative thinking with the ongoing efforts
to save Wall Street from its own irresponsible actions. It seems that the U.S.
government and the federal reserve will finally succeed in realizing a foundational
tenet of liberal politics - change the laws and the way financial markets work
so that we can eliminate personal responsibility and individual accountability
once and for all.
Just ignore the fact that the "full faith and credit" of the United
States government will be undermined and perhaps destroyed. Never mind that
every individual involved here has made decisions that they knew had risk and
Lets just ignore the terms of existing mortgage loans, let all borrowers in
default off the hook, pass some new laws, and expand FHA so that the American
taxpayer can be required to pick up the tab for a new round of subprime lending
under the guise of "government guaranteed loans".
That way we can avoid a financial meltdown, avoid consequences of our collective
actions, and continue to expand this madness even further by making the same
stupid financial decisions in the future at taxpayer expense.
But in pondering the situation in which we now find ourselves, I realized that
in fact this line of reasoning may actually be used to save the world and solve
all of the worlds major problems.
If we can simply decide to alter the way financial markets operate, change
existing contractual commitments in the middle of the game, and in the process
ignore the long term consequences of such ill advised actions, then lets just
take this line of reasoning one step further and solve all of the worlds problems.
As soon as the U.S. government gets finished solving the world credit
crisis, which may take another week or two, lets move on to some other
Global warming - How about a law that stops global warming by mandating that
all future carbon emissions should fall to the ground and wash away with the
next good rain storm?
Eliminate the threat of world pandemics like Bird Flu - How about a law that
says that all birds who are sneezing or have a "runny beak" shall
be required to stay at least 1000 feet away from any humans?
World Hunger - While we're at it, lets make sure that all of the oppressive
regimes in the "third world" are required to feed all of their citizens
until they get at least as fat as the average citizen of "first world"
I know what you are thinking...these are obviously silly ideas that can't be
enforced by passing laws...I rest my case.
Only one thing can solve the present financial crisis we find ourselves in,
and that is to let the chips fall where they may. Let the free
markets do their thing, let the accountability fall where it lies...at the feet
of those who have made irresponsible financial decisions that they must be held
accountable for. Let all involved learn their lessons, and learn that decisions
have consequences, and that risk and reward go hand in hand.
We will never solve problems by ignoring them, failing to account for them
or by trying to avoid the consequences of our actions. Borrowers who borrowed
more than they could afford should learn that there is a price to be paid for
such irresponsibility. Lenders who make loans to people who can't afford those
loans need to understand that there are consequences for such irresponsible
business practices. Investors seeking high returns need to understand that high
risk follows high reward. All investments look good on paper, but reality can
be a very different thing.
Until we are willing to confront our own financial irresponsibility
by facing the consequences of our own personal decisions all the way down the
financial "food chain", we will never reach a point of true financial
stability again. America is already at a crisis point, and a potential turning
point in our history that theatens to undermine our national stability and could
well be our undoing in the near future. Only a return to integrity and personal
accountability will stabilize the system and restore the "full faith and
credit" of the United States of America.
Any financial system is only as good as the integrity and commitment of the
individuals who are involved in it. When it's all said and done, it all boils
down the the actions and decisions of millions of individuals. There is a reason
why home buyers were once required to make substantial downpayments. And there
is a reason why financial managers are expected to follow common sense rules
of finance and investment.
Oh - I just thought of one more law we need to pass...let's recognize that
the government is not our "baby-daddy". We don't need more "child
support" to be paid by already over-burdened American taxpayers. Let's
pass a law that says that all members of the U.S. Congress, and all state and
local municipalities must manage taxpayer funds with sound financial principles
so that the american taxpayers actually realize a solid return on their investment...Yeah,
I know, this really IS the most ridiculous idea of all, but you can't blame
me for daydreaming.